SGDEUR breaks below key technical support level
Singapore Dollar/Euro (SGDEUR) Technical Analysis Report for Mar 27, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, SGDEUR ended the week -2.47% lower at 0.6289 after losing 44 pips (-0.69%) today. Today's close at 0.6289 marks the lowest recorded closing price since October 16, 2018. Trading 28 pips higher after the open, SGD/EUR was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on March 18th, SGDEUR actually gained 1.45% on the following trading day. Closing below Thursday's low at 0.6315, the forex pair confirmed its breakout through the previous session low after trading up to 32 pips below it intraday.
Daily Candlestick Chart (SGDEUR as at Mar 27, 2020):
Friday's trading range has been 78 pips (1.23%), that's slightly below the last trading month's daily average range of 88 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently strongly lower than usual for SGDEUR.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 0.6301 (now R1), which is likely to act as resistance going forward. After having been unable to move above 0.6365 in the prior session, the pair ran into sellers again around the same price level today, missing to move higher than 0.6361.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
With prices trading close to this year's low at 0.6261, downside momentum might speed up should the currency break out to new lows for the year.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Close near low of period" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for SGD/EUR. Out of 475 times, SGDEUR closed higher 54.74% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 55.79% with an average market move of 0.16%.